When M&A transactions are completed and the deal is complete, but if the companies fail to implement post-closing integration properly, they can be missing out on significant value. In all M&A activities Merger acquisition integration is the most difficult and time-consuming to execute. A well-functioning team, with a solid structure, clear communication, and a sound strategy are all necessary for success.
Many of the challenges that companies encounter during integration could be avoided by planning for integration in advance. For instance the integration of systems requires careful consideration of the ownership of data, process synchronization, and other issues. Innovative IT solutions are required to allow the new business to reap the benefits quickly. Ideally, planning should start with due diligence, and the PMI framework should be finalized prior to closing the deal. The most important factor to PMI success is to determine and track important integration milestones to track progress and to concentrate on the goal of the transaction.
One of the most common mistakes when integrating is to integrate too much and destroy value by fundamentally altering aspects of the acquired company that made it attractive in the first place. Companies that acquire companies typically underestimate try this out the time it takes to successfully integrate a newly acquired business.
Another mistake that is common is to not examine the working and cultural norms in depth enough. For instance, if the culture of two firms differ and there are clashes, it is likely to happen. To avoid this, the acquiring firm can begin assessing the situation during the due diligence phase by inviting key individuals from the target organization to review their work practices and culture. This is a useful way to predict the type of integration strategies that will be required following the deal closes.